This matter is before the Court on the parties' various Motions for Summary Judgment. The claims in this case arise following the conviction for fraudulent misappropriation of client funds by Defendant William F. Conour ("Mr. Conour"), a once-prominent personal injury/wrongful death attorney in the Indiana legal community. The parties involved in this case are Plaintiff ACF 2006 Corp. ("ACF"), a secured creditor of Mr. Conour and his law firm; Defendants Timothy F. Devereux ("Mr. Devereux") and Mark C. Ladendorf, Attorney at Law, P.C. (the "Ladendorf Firm"), attorneys who took over some of Mr. Conour's cases; and Intervenors David L. Beals, Loretta Beals, Kristen Beals ("the Beals"), Sara J. Skelton (Masterson) individually and as Personal Representative of the Estate of Michael Condon, and Zackery Condon ("the Condons"), victims whose settlement money was stolen by Mr. Conour.

ACF's Complaint seeks a money judgment against Mr. Conour and Conour Law Firm, LLC ("the Conour Firm") for breach of their obligations under certain loan agreements and guaranties. ACF also seeks a declaratory judgment against the Ladendorf Firm, Mr. Devereux, Cohen & Malad, LLP ("Cohen & Malad") and Jeffrey A Hammond ("Mr. Hammond") that the attorneys' fees and expense reimbursements recovered in certain contingency fee cases are subject to ACF's security interest and are part of ACF's collateral securing the obligations of Mr. Conour and the Conour Firm. ACF also seeks an accounting and turnover of the disputed collateral by all Defendants. Intervenors seek a determination of the amount of attorneys' fees held by the Defendants that is available for the satisfaction of the Intervenors' claims; a determination of the validity of the security interest claimed by ACF; a determination of the priority of the claims between the Intervenors and ACF; and collection and distribution of funds according to the Court's determination of priorities. For the reasons set forth below, ACF's Motion is GRANTED in part and DENIED in part, the Intervenors' Motion is DENIED, and Defendants' Motion is GRANTED.

I. BACKGROUND

The material facts in this case are not in dispute. Plaintiff ACF is a Tennessee corporation and a successor in interest to Advocate Capitol, Inc. ("Advocate"). Advocate is registered as an industrial loan and thrift company under Tennessee law. On or about January 18, 2008, Mr. Conour and the Conour Firm executed a Master Loan and Security Agreement in favor of Advocate. Thereafter, on or about January 18, 2009, Mr. Conour and the Conour Firm executed an Amended and Restated Master Loan and Security Agreement in favor of Advocate. On or about January 18, 2010, Mr. Conour and the Conour Firm executed an Amended Loan and Restated Master Loan and Security Agreement in favor of Advocate, which amended and restated the prior loan agreements (collectively, the "Loan Agreements"). The Loan Agreements were amended again by a letter dated January 13, 2011. Mr. Conour also executed Guaranties in favor of Advocate on or about January 18, 2008 and January 18, 2009. The Loan Agreements and the Guaranties are governed by Tennessee law. The purpose of the Loan Agreements was to finance the advanced expenses associated with representation of legal clients in personal injury, medical malpractice, and other tort actions. The Conour Firm typically entered into contingent fee agreements with clients and the advanced expenses were to be repaid from any recoveries.

Under the Loan Agreements, Mr. Conour and the Conour Firm granted Advocate a continuing security interest in various collateral including, but not limited to, the following:

All accounts, instruments, chattel paper, general intangibles, payment intangibles (all as defined in Article 9 of the Code), and all similar rights that Borrower may have of every nature and kind, including specifically and without limitation, all of Borrower's rights to receive payment or otherwise, for legal and other services rendered and to be rendered, and for costs and expenses advanced and to be advanced, and all other rights and interest that Borrower may have in and with respect to each and every Client Matter.

(the "Collateral"). Advocate perfected its security interest in the Collateral by filing Uniform Commercial Code ("UCC") financing statements with the Indiana Secretary of State's office. In 2013 Advocate assigned its interest under, in and to the Loans, the Loan Agreements and the Guaranties to ACF, and an amended filing statement was filed with the Indiana Secretary of State on August 9, 2013.

Pursuant to the Loan Agreements, Advocate made various loans (the "Loans") to Mr. Conour and the Conour Firm, which matured and became due and payable in full on January 18, 2012. Despite the Loans having matured, Mr. Conour and the Conour Firm failed or refused to pay the unpaid principal, interest, administrative fees, legal fees, and expenses owed under the Loan Agreements and the Guaranties. ACF demanded payment of the Loans and that Mr. Conour and the Conour Firm hold all of ACF's Collateral in trust for the benefit of ACF. As of May 31, 2014, the total amount of principal, interest, fees and expenses owed to ACF pursuant to the Loan Agreements was $681, 133.24, which included a principal in the amount of $400, 050.81, accrued but unpaid interest in the amount of $190, 030.15, and fees and expenses in the amount of $91, 052.28.

Beginning in February 2008, Mr. Devereux was employed as an associate attorney at the Conour Firm. Before Mr. Devereux left that employment, the Conour Firm had entered into contingency fee agreements and performed services for clients in connection with numerous cases. Due to the Conour Firm's refusal to remain current on its financial obligations, which failure significantly impaired Mr. Devereux's ability to prosecute the personal injury cases in question, Mr. Devereux resigned his employment from the Conour Firm on December 22, 2011. Upon his resignation, Mr. Devereux joined the Ladendorf Firm as an associate attorney. Following Mr. Devereux's resignation from the Conour Firm, numerous clients of the Conour Firm expressed their interest to have Mr. Devereux continue to represent them on their pending personal injury cases through his new employer, the Ladendorf Firm. Mr. Conour and the Conour Firm were advised in writing as to each client who chose to terminate their representation by the Conour Firm and be represented by Mr. Devereux and the Ladendorf Firm. Mr. Devereux and the Ladendorf Firm took possession of twenty-one personal injury case files, which were all being handled on a contingent fee basis (the "Subject Cases").

Mr. Hammond was also employed as an associate attorney at the Conour Firm. Before Mr. Hammond left that employment, the Conour Firm entered into a contingency fee agreement and performed service for clients in connection with Marks v. Headwaters Resources, Inc., et al., filed in the Lake County Superior Court (the "Marks Case"). Mr. Hammond became employed by Cohen & Malad after leaving the Conour Firm, and continued to represent the clients in the Marks Case. However, prior to accepting that case, ACF, Mr. Hammond, and Cohen & Malad reached an agreement regarding the division of any attorneys' fees recovered in that case. Mr. Hammond and Cohen & Malad agreed to pay ACF, and ACF has agreed to accept, $21, 440.00 in settlement of any amount owed to Mr. Conour and/or the Conour Firm in connection with the Marks Case.

Mr. Devereux was later contacted by the Federal Bureau of Investigation regarding an investigation into Mr. Conour and the Conour Firm for mishandling client settlement funds that were to have been placed in annuities for the benefit of injured clients. A federal criminal complaint was filed on April 27, 2012 against Mr. Conour in the U.S. District Court for the Southern District of Indiana. Mr. Conour was charged with violating 18 U.S.C. § 1343 for defrauding clients of his legal practice. He pled guilty and admitted that the claims set forth in the federal criminal complaint were true. Shortly after being criminally charged, disciplinary charges were filed against Mr. Conour by the Indiana Supreme Court Disciplinary Commission. In response to those disciplinary charges, Mr. Conour resigned from the practice of law in Indiana by tendering his Affidavit of Resignation, which also stated that the material facts alleged in the criminal complaint were true. Mr. Conour admitted to misappropriating and unlawfully converting more than $4, 500, 000.00 belonging to more than twenty-five clients. He was sentenced to ten years in federal prison. In addition, an Order of Restitution was entered in the criminal judgment against Mr. Conour, ordering him to make restitution to Intervenors David and Laurie Beals in the amount of $135, 928.00, Intervenor Kristin Beals in the amount of $316, 953.00, and Intervenor Zach Condon in the amount of $240, 000.00, as well as approximately twenty-five other victims. (the "Restitution Order"). The United States recorded its Notice of Lien for Fine and/or Restitution (the "Restitution Lien") in the Recorder's Office, Marion County, Indiana on April 15, 2014.

The Beals and the Condons are former clients of Mr. Conour. The Beals obtained a negotiated settlement in Morgan County, Indiana on July 26, 1996. Under the terms of the settlement agreement, a portion of the settlement proceeds was to be placed into a structured settlement annuity, with payouts over multiple years. Instead of purchasing the annuity, Mr. Conour and the Conour Firm kept the settlement money. The Beals did not learn of the embezzlement of their funds until after the commencement of the criminal action against Mr. Conour, and they filed a lawsuit against Mr. Conour and the Conour ...

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